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All In Podcast Episode 158 Recap and Notes December 22 2023

December 22 2023


  • Chamath takes over the Pod

    • JCal feeling bad
  • Sacks holiday party was huge

  • AllinHug

  • Red Sea trade disruption

    • Houthi
    • One of the world’s busiest trade routes disrupted
    • Ryan Petersen brought in
    • 30% of containers disrupted
    • Mostly from Asia to Europe - so they are hit
    • 20-25% cut in shipping capacity basically
    • This has been a big choke point for 1000s of years
    • Rebel forces in Yemen have been launching attacks at the ships
    • Can’t operate a ship without insurance - insurance companies won’t insure you
    • 3x increase in ocean freight price from Asia to Europe
    • Suez Canal is too valuable to modern civilization to allow a group of rebels to hurt it for too long
    • This is a Shia group that is very powerful in Yemen - not internationally recognized but have agency and control vast parts of the country
    • Is this related to apparent ~80 attacks on US bases in the region in the last few months?
    • US might take military action as part of Operation Prosperity Guardian
    • If conflict rages through 2024 it might increase prices
    • Not good for China because this will impact them a lot
    • This might impact Saudi also - they will not be happy
    • European inflation might be higher - cost to them is 20% more, cost to east coast of US is 8% more
    • Saudi Arabia, Qatar, UAE will align probably to push back on all this instability in the region - against Iran
    • China just brokered a peace between Saudi and Iran
    • If true that this is a second order effect of the Israel Hamas war, then that’s scary for the world
    • Not sure what the diplomatic solution here is - Israel is not backing down, Houthis seem to not be backing down
    • Air freight is ~4 times sea freight
    • But also volume - 747 can take 7 40 foot containers, but a ship can take 10000 40 foot containers
    • Ryan back as CEO of FlexPort
  • M&A

    • Adobe Figma called off
    • Illumina Grail unwound
    • Employees, LPs, all affected
    • Cigna Humana also called off
    • Seems there is no viable M&A path for startups now
    • Main path to get liquid is IPO
    • But even IPOs are hard because banks won’t underwrite, etc
    • Regulators are taking so long and then don’t allow it - this means startups will want a big breakup fee if deal fails - like Figma got $1B from Adobe
    • So this chills M&A activity
    • In a higher interest rate environment, ROIC is more carefully looked at
    • Today Facebook-Whatsapp deal would never happen
    • Can’t have risk capital flow into US in this regime
    • Now instead use AI tools and raise friends and family round to start a profitable business from day 1
    • In the 90s you could get inside information from CEOs
    • Then RegFD - regulation full disclosure - passed - good legislation, to make information available to all
    • But then only some events held to get information - and analysts can talk to CEOs
    • Big Banks can help build some AI tools trained on public financial data
    • Alternative view is to build a good business and not worry about liquidity, etc
    • If you don’t have to raise capital, you’re better off
    • Tech company vs regular company - think more high gross margin vs low gross margin (tech used to be ~80%, non would be ~20%)
    • AI might be the biggest disrupter to VC
      • 1h2m mark - raise less money, run for longer, own bigger portion of the company, have a smaller, more distributed, more efficient company
        • Might have better outcome at $50M-$100M exit vs $2B exit previously
    • Its positive for founders and employees
    • Smaller funds achieve better results - from some experience
    • Sacks is maybe starting Yammer 3.0
    • SaaSGrid success
  • Realtor lawsuits

    • $1.8B in damages - will hurt the NAR

    • Could go more

    • 6% fee is a convention, not a rule

    • Have to be a licensed broker to list a home on MLS

    • NAR forms are a bottleneck

    • The market is tied up by NAR bureaucracy

    • Its basically just a data entry service

    • US has 1.6M real estate agents



  • Colorado Supreme Court removes Trump from ballot

    • To deprive an American citizen of a big right (running for President) for a crime they are not convicted of is a bad sign
    • All the judges were democratic appointments
    • Democrats don’t want Trump standing for a vote that he might win
    • The documents case was a game - its all about keeping him off the ballot
    • Liberals are the true authoritarians
    • Only people who live in a bubble within a bubble within a bubble think its a good idea
      • Drowned in mainstream media, went to Ivy league schools, elected by Democrats

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